You CAN Navigate A Bidding War!

The 2014 spring real estate market is already off to a hot start.  Inventory has been tight.  Pent up demand has buyers out earlier than usual, despite frigid weather!  Bidding wars which fell by the wayside over the last few years seem to be back with a vengeance in certain price ranges.  In this market, when a house is priced right, we’ve heard of sellers receiving as many as 13 offers within a week of listing their home!  And not just for turn- key properties.  Homes that need work are also drawing buyers in droves.

To compete in today’s market, buyers must know how to navigate the multiple offer scenario.  It’s vitally important if you want to stay in the game and land the property you desire.  First, the basics should be in place.  Find yourself a savvy realtor who intimately knows the area where you’re buying.  Second, be sure that you’re fully prepared as far as finances go.  If you will be financing the purchase, at minimum you must be pre-approved for a mortgage and have a letter from a lender stating such.  The sellers will simply not be able to take your offer seriously if there are other interested parties who are approved but you’re not.  Review and refine your list of must-haves, so that you are ready to decide and act quickly on the right home.  With multiple offer scenarios, the adage “you snooze, you lose” is legitimate.  Finally, do your homework getting familiar with market values where you are buying and know what kind of home you can expect in your price range.

When the right property comes along and you’re ready to make an offer, here are some things to consider if it seems the house of your dreams will garner multiple offers.  Figure out your absolute top offer dollars-wise.  Know how high you are willing and able to go.  In a “seller’s market” prices tend to rise and good homes often go for asking price or over asking price.  Start by going in with as strong a dollar offer as you feel comfortable with – but know your personal comfort zone and financial limits.

Let your realtor guide you in the art of negotiation.  Their expertise can help you construct an offer strategy based on the particulars of this property.  Next to sales price, sellers often care a lot about closing dates.  Being flexible on this may make you more appealing than your competition.  Other ways to improve your offer and make it stand out against the others is to consider dropping one or more of the usual contingencies.  Maybe you don’t need to sell a property before buying this one – that’s good!  Maybe you are so confident about your ability to secure a mortgage that you can waive the mortgage contingency.  Perhaps you don’t care about lead paint issues. Or, you are willing to purchase the property “as-is” and you can drop the inspection contingency and simply inspect the home for “informational” purposes, not for negotiation purposes.  Any one or combination of these could be enough to give you the  edge.  Generally, the “cleaner” the offer, the better.   And contrary to what you may think, it doesn’t always come down to dollars and cents.  These other factors do play a part.

As icing on top, consider writing the sellers a personal and heartfelt letter explaining why this home is right for you.  Politely outline why they should choose your offer.  Some buyers go as far as including a photo of themselves!

From the seller’s point of view, multiple offers can be handled a few different ways, but probably the most common is that all buyers making offers are notified of the situation and asked for their highest and best offer by a particular date and time. Since that should be the best offer, there usually is not an opportunity for another offer after that deadline. If it is a bank owned home, the banks typically do not counter offer. They expect your highest and best to be your final offer.

When you’ve made your best offer, then sit back and wait.  Feel confident knowing that you’ve done the best you can do!  Try not to get too attached to any particular home – because one truth in real estate is that there will always be another property!  Good luck!

Please contact us if you have questions or need assistance with your home search! Www.mendosabalboni.com, 978-341-5400